Feb 25 U.S. economic growth could surpass expectations this year, but an anemic labor market requires ongoing support from monetary policy, a top Federal Reserve official said on Monday.
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, cited strength in sectors such as housing, autos, and energy production and exploration as factors that could push the U.S. economy to grow at a rate beyond his current forecast for a range between 2 percent and 2.5 percent.
"If momentum continues and some of the potholes out there are avoided, particularly a political crisis around fiscal decisions, growth could accelerate," Lockhart said in remarks prepared for delivery to a conference at the University of Tennessee.
Still, Lockhart said current growth rates were not enough to speed up the drop in unemployment, and he therefore suggested the U.S. central bank will have to maintain its current bond-buying stimulus for much of this year.
"Continuing the asset purchase program to support the recovery and to improve employment conditions remains appropriate for now," he said. "And given the outlook and associated risks, I am comfortable with sticking with the current approach at least into the second half of the year."